The United States and Finland are the two most competitive economies in the world, according to a report by the World Economics Forum.

The new report rates countries on various measures of business competitiveness.

In the key global competitiveness category, Finland has overtaken the United States as the country which has the best climate for economic growth.

And five northern European countries are represented in the top 10, while only Taiwan and Singapore are from Asia.

The new ratings may reflect a change in the way the scale was constructed, which gave less weight to the size of the public sector and more weight to the perceptions of honest government when considering the quality of public institutions.

"If there is one lesson to be drawn from our report, it is that the strength and coherence of government policies have an enormous bearing on a country's ranking," said Augusto Lopez-Claros, chief economist of the World Economic Forum.

Public institutions

The United Kingdom and Canada both slipped down in the ratings to 15th and 16th place, due to a perceived drop in the quality of their public institutions.

This also affected China, which fell to 44th place, from 33rd place last year.

The survey includes 102 countries, with most of the developing world ranking at the bottom.

RANKING: GROWTH COMPETITIVENESS

1. Finland

2. USA

3. Sweden

4. Denmark

5. Taiwan

6. Singapore

7. Switzerland

8. Iceland

9. Norway

10. Australia

The lowest ranking countries for competitiveness were Zimbabwe, Bangladesh, Chad, Mali, and Haiti.

Germany and France showed a slight improvement, despite their economic difficulties, while Japan moved up to 11th place.

The highest ranking African country was Botswana; Chile topped the poll in Latin America; while Jordan showed a sharp rise among Middle Eastern countries.

Ratings war

The survey also rated business competitiveness, which has a strong influence on foreign investment.

It found broadly similar results, although the UK, France, Germany, and the Netherlands all rose in the ratings, reflecting the sophistication of their company operations and the relatively open business climate.

RANKING: BUSINESS COMPETITIVENESS

1. Finland

2. USA

3. Sweden

4. Denmark

5. Germany

6. United Kingdom

7. Switzerland

8. Singapore

9. Netherlands

10. France

Among the fastest-improving middle-income countries in this category were Latvia, Vietnam, Greece, Mexico, Mauritius and Thailand.

But Hungary, Sri Lanka, Croatia, and Trinidad all fell in the ratings.

The rankings are mainly based on a survey of executive opinion carried out by the World Economics Forum every year.

They therefore reflect perception as much as the reality of countries' economic performance.